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Income tax threshold increase 'a welcome change'

The government's decision to raise the income tax threshold to £7,475 from next year has been welcomed by the TaxPayers' Alliance.

Mark Wallace, the organisation's campaign director, said millions of people will be pleased by this move.

However, he warned that plans to increase VAT from 17.5 per cent to 20 per cent will place pressure on the poor.

"I think things like the VAT rise will certainly hit people in the pockets, but hopefully if [the government] identify more spending cuts quickly they will be able to reverse the VAT rise," Mr Wallace commented.

The income tax threshold should be raised to £10,000 at least in future, he added.

Chancellor George Osborne revealed that 880,000 of the lowest earners in Britain will be removed from tax altogether.

Furthermore, it was revealed that 23 million people will benefit by £170 a year from the decision to increase the threshold.